Mumbai: Inflationary risks on the back of higher crude oil prices and a weak rupee coupled with a rise in global protectionist measures dragged the key Indian equity indices deep into the red on Tuesday.

According to market observers, foreign fund outflows and downturn in Asian and European markets dented domestic investors' sentiments.

Index-wise, the Nifty50 of the National Stock Exchange (NSE) closed at 11,287.50 points, lower by 150.60 points or 1.32 per cent from its previous close of 11,438.10 points.

The benchmark S&P BSE Sensex, which had opened at 38,017.49 points, closed at 37,413.13 points, lower by 509.04 points or 1.34 per cent from the previous close of 37,922.17 points.

It touched an intra-day high of 38,043.27 points and a low of 37,361.20 points.

In the broader markets, the S&P BSE Mid-cap declined by 1.36 per cent and the S&P BSE Small-cap ended 1.37 per cent lower from its previous close.

The BSE market breadth was bearish with 1,872 declines against 845 advances. The total number of stocks traded on the exchange were 2,867 and only 150 scrips ended unchanged.

"Markets corrected further on Tuesday after a shaky opening. The losses came on the back of negative global cues as concerns over escalating tensions surrounding the US-China trade war continued to dampen investor sentiments," said Deepak Jasani, Head of Retail Research at HDFC Securities.

On the currency front, the Indian rupee touched a new closing low of 72.69 to the US dollar on Tuesday after it touched a fresh low of 72.74.

The Indian rupee settled 24 paise weaker than its previous close of 72.45 per greenback.

"Selling continued as worries over widening deficit due to rising oil price and weak rupee added clouds over investor's sentiment," said Vinod Nair, Head of Research, Geojit Financial Services.

"FMCG was hit the most today owing to weak market sentiment and stretched valuation. The threat of trade tariffs, outflow of foreign funds and concern on domestic macros will influence investors to stay on a cautious note."

Sector-wise, all the S&P BSE indices ended in the red. The consumer durables index lost the most, by 510.74 points, the banking index declined by 428.64 points and the auto index slipped 368.54 points from its previous close.

The main gainers on the Sensex were Coal India, up 0.95 per cent at Rs 282.80; NTPC, up 0.36 per cent at Rs 169.55; Infosys up 0.31 per cent at Rs 734.25; Mahindra and Mahindra, up 0.26 per cent at Rs 940.45; Asian Paints, up 0.26 per cent at Rs 1,295.85 per share.

The majors losers were Tata Steel, down 3.46 per cent at Rs 592.30; Power Grid, down 3.21 per cent at Rs 186.85; Hero MotoCorp, up 3.06 per cent at Rs 3,178; Tata Motors, down 3.03 per cent at Rs 267.20; and ITC, down 2.92 per cent at Rs 297.25 per share.